Upfront Investor | Free Trade Certainly Not ‘Fair Trade’….

While our Prime Minister Tony Abbott gave a speech at the G20 espousing the virtues of free trade, many Australians are still confused about the whole trade equation and struggle to see how we don’t end up losing out as many of our trading partners still slap hefty tariffs on our goods. It shouldn’t just be called free trade it needs to be called fair trade.

Australia exports cars to Asian countries where tariffs are set to around 40 per cent and yet we tax their exported vehicles coming in as low as 5 per cent. It’s not just the car industry that has been battling to survive, our farmers, growers and other manufacturers appear to have been left to sink or swim. To get a feel for how big this issue is take a closer look at the labels on products in the supermarket at Coles, Woolworths or IGA. It is a challenge to select Australian made goods.

In this free trade arrangement it seems as though the only area that is sacred is mining. I would hate to think that all we end up doing well as a nation is dig giant holes in the ground. In the end the only way for Australians to really have a say is to write on mass to the PM, and support Australian companies when you spend.

So what do we expect in the market?

The Australian market momentum softened on Thursday, sliding back below 5300 points, still well above strong support between 5000 and 5200 points underpinning the current rise. The fall measured 65 points or around 1.0 per cent and was to a large degree driven by short term sentiment about Chinese manufacturing data, which came in below expectations. To put this in perspective an analysis of the weekly bar chart of the All Ordinaries Index over the past four years reveals this move would almost go unnoticed given the many prior rises and falls the market experienced. The market will often fall between around 5.0 to 12.0 per cent when it takes a breather.

When data is released involving growth in the US, China or the global economy the market can react quite strongly as if it is big news, however, in the scheme of the global economy, this data may turn out to be insignificant. A discussion about these announcements brings me back to what drives the market which is greed and fear. So it is important for investors to be aware of this information and when it is released and also how it provides day traders with short term opportunities.


To your profitable trading,

Dale Gillham
Chief Analyst
Wealth Within

Dale Gillham, ‘one of the country’s most respected analysts’ (Wealth Creator Magazine, Nov/Dec 2004), sought after key note speaker and author of the best selling book ‘How to Beat the Managed Funds by 20%’. Dale has assisted thousands of traders and investors to learn to trade shares and become confident and profitable in their direct share investments. Tired of an industry saturated by quick fix gimmicks and expensive short-courses, Dale co-founded Wealth Within to provide ‘ real education and ongoing personalised support’, as well as independent investment adviceto traders and investors who have become disillusioned by the market for one reason or another. As testament to this, Wealth Within launched Australia’s first and only nationally accredited Diploma and Advanced Diploma of Share Trading and Investment.